Ernst & Young appointed as Consultant to tap Advertising Potential of Indian Railways

Indian Railways appoints Ernst & Young (EY) as consultant to mop up Rs.5000 Crore advertising revenue potential from the Railway Stations and Passenger Trains. EY – a global leader in its Assurance, Tax, Transaction and Advisory services shall identify assets and pricing strategy across 7000 stations for the purpose of advertising. EY will not only help the Railways identify ‘ad-worthy’ assets across stations and routes, but also come up with a Pricing Strategy

New Delhi: Initiating a large-scale exercise to identify and leverage pan-India advertising opportunities in railway stations and trains, Indian Railways has appointed Ernst & Young (trading as EY) as consultant to undertake this job on its behalf.

Headquartered in London, EY operates as a network of member firms which are separate legal entities in individual countries. The Railway PSU, RITES, the consulting wing for Indian Railways, awarded the mandate to EY following a multi-party bid, said a release.

Minister of Railways Suresh Prabhakar Prabhu has been emphasising on increasing revenues through the non-fare box route, especially through advertising. Initial estimates have indicated the advertising potential of the Railways in excess of Rs. 5,000 crore over the next few years.

EY has been assigned the job of tapping the advertising potential of Indian Railways assets, including a fleet of trains in a wide network of about 7,000 railway stations across India. EY’s specialised offering, Marketing and Advertising Risk Services (MARS), will help Indian Railways identify assets across its stations for the purpose of advertising and will also develop a pricing strategy to evaluate them for advertisers. The firm has commenced its exercise.

This is the first time in the country that such a large scale project on advertising for Railways has been initiated. The move aims to enhance revenue through non-fare box route as emphasized by Railway Minister. The exercise to help develop packages meeting specific demographic and geographic needs ensuring ease of business to advertisers and increased transparency & accountability and also help create a neutral assessment on the return of investments by advertisers in this medium.

In preliminary discussions held between Railway and EY officials, it was emphasised that the exercise would be completed in a time-bound frame.

Currently, advertisers face a number of concerns in the outdoor media industry, including lack of reliable data pertaining to site visitors and vandalism of outdoor assets. Hence, an important aspect of this exercise will be the creation of packages that meet specific demographic and geographic needs. Further, the advertising contracts need to be modified so as to allow ease of business to advertisers and increase transparency and accountability.

A unique aspect of this exercise will be the creation of a neutral assessment on the return on investments by advertisers in this medium. Advertisers struggle with the measurability of traditional media. In the case of railway assets, eyeballs, quantity of time spent and segmentation of viewers is highly quantifiable as the Railways maintains ticketing and station footfall data in its database.

In these discussions, Chairman, Railway Board, A.K.Mital said “this move by the Indian Railways will allow for revenue enhancement for the enterprise without putting any burden on its passengers. EY and Indian Railways will engage with leading advertisers through the course of this project for effective optimisation of railway assets. In the past, the railways has used its assets to earn revenues through advertising, but limited the same to train wraps and display spaces in stations. This is the first time that a large-scale project to identify and leverage pan-India advertising opportunities has been initiated.”

As per media reports, Farokh Balsara, Partner and National Leader – Media and Entertainment, EY India said, “there has never been a nation-wide assessment of the advertising potential of assets on such a large scale. We are excited and proud to be associated with Indian Railways on a project that will generate advertising revenues and, in turn, help to expand and improve services for commuters. This aligns with EY’s purpose of building a better working world.”

News media also reported Bharat Rajamani, Director, EY India, saying “through this mandate we will create a new medium for advertisers to leverage in order to reach their target audience. With a large expanse of assets and high measurability of its reach, the Indian Railways’ assets will be beneficial to local and national clients alike.”

RoI for Advertisers

The Ministry said a “unique” aspect of this exercise will be the creation of a neutral assessment on the return of investments (RoI) for advertisers.

Advertisers usually struggle with the measurability of traditional media. In the case of railway assets, their fears will be allayed, said the release. This is because eyeballs, quantity of time spent and segmentation of viewers are highly quantifiable, as the Railways maintains ticketing and station footfall data as part of its database.